Holden chief says company will decide after election whether it will continue manufacturing here.

Poll could kill car industry

The future of Australia's car industry looks increasingly uncertain, with Holden chief Mike Devereux saying the company will decide after the election whether it will continue manufacturing cars here.

As Industry Minister Kim Carr pledged a further $200 million of unspecified funding for car manufacturing, and Toyota announced it would invest $123 million from 2015 to develop a facelift for the Camry, Opposition Leader Tony Abbott stood by his decision to cut $500 million from support for the industry.

Senator Carr said the Coalition's policy would force Australia's car makers to shut down. ''Their policy would see the end of the automotive industry in Australia,'' he said. ''Automotive manufacturing around the world is very, very difficult at the moment. Do we want an automotive industry in Australia or don't we?''

But Mr Abbott blamed the government for promising to wind down the $800-million-a-year tax break for cars bought through salary sacrifice, saying it would cost local manufacturers 20 per cent of their sales. ''We're going to get rid of that,'' he said. ''The opposition is offering [car makers] a better deal.''

Holden factory Photo: Suppliedx

Mr Devereux, who has warned that Holden would close down unless government policies for the industry were ''clear, consistent and globally competitive'', said the company was considering investing $1 billion to develop new models of the Cruze and Commodore after 2016, but would postpone its decision until after the election.

''We would need to wait until, frankly, the outcome of the election to be able to commit that $1 billion investment,'' he said. ''We're talking about investments that will take us out beyond 2022.''

Mr Abbott criticised Senator Carr's promise to increase funding for the industry, saying the car industry had been ''very good at using taxpayers' money, but … [not] that good at maintaining production and jobs.''

''Let's face it, this government has given a lot of money in the last couple of years to the motor industry and told us it was going to create jobs, when in fact within months of those announcements jobs have been shed,'' he said. ''In the case of Ford, there is going to be an entire closure in a couple of years' time.''

Mr Abbott stood by his plan to cut $500 million from the car industry's subsidies, slashing them by more than half, saying the Coalition's policy was ''absolutely crystal clear''.

A Holden spokesman was careful not to take sides. ''Holden has been discussing with both the government and the opposition the need for long-term, globally competitive automotive policy,'' he said.

The spokesman gave Senator Carr's announcement of $200 million extra funding cautious applause, despite criticism in the industry that it is inadequate to compensate for the losses that would be caused by ending the tax break for cars bought through salary sacrifice.